Does the market value the social dimension? International evidence

Abstract

International audience

This paper addresses the link between the social component of corporate social responsibility and the market valuation of equities. Preceding results on this topic, to our knowledge, remain scarce and inconclusive. Using a rich and global dataset-Asset4 by Thomson Reuters-we find that social expenses are clearly value-adding. Moreover, all the social subsets are positively related to goodwill, even if those concerning human capital are revealed to be more significant. Social expenses therefore prove to be a social investment, creating value for both social stakeholders and shareholders. Based on the social subsets, we find that the expenses related to human capital are more value-adding for shareholders than those related to corporate reputation.